The Declining Market Share of Carpet in the Commercial Flooring Industry
Once the undisputed leader in the flooring market, carpet is now overshadowed by hard surface flooring such as Luxury Vinyl Tile (LVT).
Carpet, specifically broadloom carpet, is experiencing a significant retraction in market share, while carpet tile, although growing slightly, is also losing ground. Principia’s market analysis shows total carpet (carpet tile and broadloom) market share within the commercial flooring segment falling from 42% in 2018 to 38% in 2023. Rigid and flexible Luxury Vinyl Tile (LVT) share has risen from 22% to 28% in the same time period.
Exploring the factors that attribute to this shift in preference of flooring designers and contractors can help provide a better understanding of the market forecast.
Hygiene Concerns and COVID-19’s Impact
With a heightened focus on cleanliness, the COVID-19 pandemic unexpectedly impacted this shift away from carpet. Many view carpet as tricky to clean and a potential breeding ground for bacteria and germs. As a result, we’ve seen the preference for easy-to-clean hard surface materials surge. The preference is especially evident in hotels, retail spaces, and educational institutions with a lot of traffic. Maintaining carpeted areas in these spaces could increase cleaning costs and more frequent updates. These same public spaces are also creating more outdoor areas which use hard surface flooring.
Cost-Effective DIY Options
The commercial flooring industry comprises two main segments – Contract and Main Street. Specifically, Main Street makes up about 30% of the market. Small retail businesses, particularly those in the Main Street segment (with project needs under 25,000 sq. ft.), are increasingly looking to cut costs on floor installations. As a result, they are opting for more do-it-yourself (DIY) options, such as click-style LVT, which provides a more straightforward installation compared to carpet.
Commercial Flooring Projects
Nearly 90% of commercial flooring sales are for repair and replacement projects rather than new construction. New projects make up only a small portion of flooring sales annually. Our research has found that these commercial projects are being designed with a “home-like” or “residential” ambiance. The availability of cost-effective wood-look flooring options, such as LVT, has been pivotal in driving this trend. While carpet still serves an essential purpose in commercial spaces, especially for sound reduction in hotels, libraries, and high-rise offices, designers are more frequently combining hard and soft flooring surfaces.
The Rise of Big Box and National Retailers
Big Box and national flooring retailers have witnessed significant sales growth and are actively expanding their presence in the commercial market. Previously, these channels had limited exposure to the commercial segment. However, with their strategic investments, these large retailers are reshaping the industry. National retailers like Floor & Decor and LL Flooring now sell very little carpet, and instead mostly offer hard surface suppliers. This channel shift in the distribution landscape has further influenced the declining market share of carpet.
The Takeaway
As the commercial flooring industry experiences a transition from soft surface materials, hard surface options like Luxury Vinyl Tile (LVT), laminate, and tile are poised to reap the benefits. As shown in the image, Principia forecasts that flexible and rigid LVT are expected to grow 3.7% and 3.5%, respectively, with broadloom carpet expected to drop by 1.1% over the next three to five years.
The future of commercial flooring lies in the adaptability and versatility of hard surface options, which are better suited to meet the evolving needs of businesses and provide a clean, sanitary, and visually appealing environment.